President Donald Trump had some disagreements with Republicans over changing the 401(k) retirement program to help finance tax cuts. Trump insisted that the middle-class favorite would remain untouched.
The chairman of the House’s tax-writing panel, Kevin Brady, wouldn’t rule out changes to the program used by 55 million U.S. workers who hold about five trillion dollars in their 401(k) accounts. This system has become a touchstone of retirement security for the middle class, Associated Press reports. Trump said couple of times that the program will be left alone.
“There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!” he wrote on Twitter on Monday.
But he went to muddy the waters when asked about Brady’s statements.
“Maybe it is, and maybe we’ll use that as negotiating. But trust me … there are certain elements of deals you don’t want to negotiate with … and Kevin knows it, and I think Kevin Brady is fantastic, but he knows how important 401(k)s are,” Trump said.
Previously Brady said that he’s discussing the issue with the president. Senior Republican senator also signaled that he would vote for a tax bill even if it crimped 401(k) tax benefits. The 401(k) issue has become a flash-point and the Republican lawmakers have been considering changes to its structure like limiting of the amount of tax-deferred contributions employees can make as a way to help finance tax cuts.
“We think, in tax reform, we can create incentives for Americans to save more and save sooner, which can help them. So we are exploring a number of ideas in those areas. … We are continuing discussions with the president, all focused on saving more, saving sooner,” Brady said.
He added that he continues to seek a compromise with rebellious Republican lawmakers from high-tax states over the tax plan’s proposed elimination of the federal deduction for state and local taxes.